In a significant ruling concerning procedural law in commercial disputes, the Andhra Pradesh High Court has held that an order deciding the admissibility or relevancy of a document is an interlocutory order under Section 8 of the Commercial Courts Act, 2015, and as such, a revision petition challenging such an order is barred. The Court made these observations while dismissing Civil Revision Petition No. 900 of 2024, filed by Sri P. Udaya Bhaskara Reddy. The revision petition was aimed at challenging an order of the Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam, regarding the admissibility of a development agreement (Ex.P1) in a commercial suit.
Background of the Case
The commercial suit (COS No. 10 of 2018) was filed by M/s. Sreepada Real Estates & Developers and another, plaintiffs, against Sri P. Udaya Bhaskara Reddy, the petitioner and the first defendant in the suit, and three other defendants. The plaintiffs sought specific performance of a development agreement dated January 31, 2013, which concerned the development of land. In the alternative, they claimed recovery of Rs. 1,71,36,372 along with interest.
The development agreement (Ex.P1) had been marked as a document in the suit, but the petitioner/first defendant, through an interlocutory application (I.A. No. 356 of 2023), moved for the de-exhibition of Ex.P1, arguing that it was not properly stamped under the Indian Stamp Act. The crux of the petitioner’s argument was that Ex.P1 should be governed by Article 6(B) of Schedule 1A of the Indian Stamp Act, which applies to agreements related to the development and sale of immovable property. The petitioner contended that the stamp duty paid on the document was insufficient and sought to have the document rejected.
In contrast, the plaintiffs argued that Ex.P1 was adequately stamped under Article 6(C) of Schedule 1A, as it dealt with the development of agricultural land into a layout, and did not fall under Article 6(B), which pertains to the sale or construction of immovable property. The plaintiffs further contended that the law does not permit de-exhibition of a document once it has been marked.
Proceedings in the Special Court
The Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam, partly allowed the petitioner’s interlocutory application on March 20, 2024, holding that Ex.P1 did not fall under Article 6(B) of the Stamp Act but rather under Article 6(C). The Court ruled that the plaintiffs must pay the deficit stamp duty along with the penalty for the document to be admitted as evidence. However, if the plaintiffs failed to pay the required duty within the prescribed time, the document would be de-exhibited.
Legal Issues Involved
The primary legal issues addressed by the Andhra Pradesh High Court were:
1. Whether the order concerning the admissibility of the document (Ex.P1) was interlocutory or final.
2. Whether a revision petition under Article 227 of the Indian Constitution was maintainable in light of Section 8 of the Commercial Courts Act, which bars revisions against interlocutory orders.
3. Whether Ex.P1 was correctly stamped under Article 6(B) or 6(C) of Schedule 1A of the Indian Stamp Act, and the impact of this on the admissibility of the document.
High Court’s Judgment
The case came before a division bench comprising Justice Ravi Nath Tilhari and Justice Nyapathy Vijay, who delivered the judgment on September 11, 2024. The Court dismissed the Civil Revision Petition, holding that the order of the Special Judge was an interlocutory order, and hence, the revision was barred under Section 8 of the Commercial Courts Act, 2015.
Key Legal Observations:
1. Bar on Revision Applications:
The Court cited Section 8 of the Commercial Courts Act, which explicitly bars any civil revision application or petition against an interlocutory order of a Commercial Court. Section 8 states:
“Notwithstanding anything contained in any other law for the time being in force, no civil revision application or petition shall be entertained against any interlocutory order of a Commercial Court, including an order on the issue of jurisdiction, and any such challenge, subject to the provisions of Section 13, shall be raised only in an appeal against the decree of the Commercial Court.”
2. Admissibility of Document and Opportunity to Pay Deficit Stamp Duty:
The High Court upheld the Special Judge’s order, which allowed the plaintiffs an opportunity to pay the deficit stamp duty along with the penalty. The Court noted that the admissibility of a document could be challenged later, in an appeal against the final judgment or decree, but not in a revision petition. It observed that the order regarding the admissibility of Ex.P1 was procedural in nature and did not constitute a final determination of the parties’ rights.
3. Nature of Interlocutory Orders:
The Court clarified the distinction between final and interlocutory orders, observing that interlocutory orders are those which do not finally determine the rights of the parties but are procedural steps in the trial. In this case, the Special Judge’s order on the admissibility of Ex.P1 did not conclude the suit but merely dealt with the procedural aspect of evidence. The High Court referred to the Supreme Court’s ruling in Shah Babulal Khimji v. Jayaben D. Kania, stating that orders on admissibility or relevancy of evidence are typically considered interlocutory orders.
Important Precedents Cited:
The Court relied on several judgments, including:
– Kandla Export Corpn. v. OCI Corpn., (2018) 14 SCC 715, where the Supreme Court ruled that interlocutory orders not covered under Order XLIII of the Civil Procedure Code are not appealable.
– Shah Babulal Khimji v. Jayaben D. Kania, (1981) 4 SCC 8, which clarified the scope of interlocutory and final orders, noting that decisions on the admissibility of documents during a trial are interlocutory and cannot be challenged immediately through revision.
Case Title: Sri P. Udaya Bhaskara Reddy v. M/s. Sreepada Real Estates & Developers and Others
Case No.: Civil Revision Petition No. 900 of 2024
Bench: Justice Ravi Nath Tilhari and Justice Nyapathy Vijay
